MORE FOREIGN INVESTMENT FOR NEWBORN FIRMS
The government has decided that a newly-formed company 'not having operations or downstream
investments' should not attract para 5 of Press Note 4 if its proposed field of business is clearly defined and does not require prior approval. Press Note 4 divides foreign investment-seeking companies into four classes: ones that undertake only business operations, ones that undertake business as well as investment, ones that undertake only investment and ones that do neither. According to guidelines, the companies that undertake only investment activities or the ones that have neither investment not business operations need government approval for foreign investment, but the conditional relaxation is for the second category. Such companies can now raise foreign investment up to the limit allowed in that business activity since the intention of doing business is evident from a company's charter filed with the registrar of companies.
investments' should not attract para 5 of Press Note 4 if its proposed field of business is clearly defined and does not require prior approval. Press Note 4 divides foreign investment-seeking companies into four classes: ones that undertake only business operations, ones that undertake business as well as investment, ones that undertake only investment and ones that do neither. According to guidelines, the companies that undertake only investment activities or the ones that have neither investment not business operations need government approval for foreign investment, but the conditional relaxation is for the second category. Such companies can now raise foreign investment up to the limit allowed in that business activity since the intention of doing business is evident from a company's charter filed with the registrar of companies.
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